Tuesday, April 17, 2007

Paperstand (TWX, KO, NCT)

The WSJ reports that inside Time Warner (TWX), senior execs are considering what was once unthinkable: whether the co should substantially reduce its cable-TV holdings over time. Cable has been a core part of the co and its precursors for decades and is now the biggest contributor to profits. But the long-term future of cable, as the Internet emerges as a viable venue for watching TV, is murky. Some within Time Warner wonder whether the co wouldn't be better off if it were to get out of cable and double down on the Web, where it already owns AOL, by buying another major Internet co. Likely is that Time Warner will decide to gradually reduce its 84% stake in Time Warner Cable (TWCAV.PK), possibly through acquisitions, while still maintaining a significant interest.

“Heard on the Street” column discusses Coca-Cola (KO), saying that since its Jun’05 debut, Coke Zero has sold more than 100m unit cases. While that is a fraction of the sales of Diet Coke or Coca-Cola Classic, the new drink is the co's "most successful launch...of any brand in 20 years," according to Chmn and CEO E. Neville Isdell. Some outsiders see signs of a bigger turnaround that reflects improving product development by Coke scientists, snazzier marketing and patched-up relations with bottlers, all areas where Coke was hurt by massive layoffs a few years ago. If the current trend holds, Mr. Isdell could win over skeptics who complain that Coke's glory days are a thing of the past. "We think the co has gotten momentum," says David Kolpak, of Victory Capital Mgmt. Unfortunately for Coke, the success of Coke Zero hasn't produced a jolt for its stock price yet. Coke shares are up 22% in the past year. Analysts say much of the rise is a result of strong growth in emerging mkts where consumers aren't bored by sodas.

Barron’s Online “Inside Scoop” section reports that 3 Newcastle (NCT) execs have buttressed their holdings with a total of $24.1m in shares of the REIT. Chmn Wesley R. Edens and Secretary Randal A. Nardone each bought 432K shares for $12m. The two men made their purchases as part of a secondary offering of 4.6m. Edens now beneficially owns 2.5m shares, a 4.7% stake, while Nardone beneficially owns 2.3m shares, a 4.3% stake. CIO Phillip Evanski joined, spending $71K on 2.5K shares. Jonathan Moreland, of InsiderInsights.com, says that the purchases at Newcastle echo an uptick in insider sentiment at other financial firms after the subprime-mortgage crisis-induced selloff. "I have recommended that ppl nibble at some of the oversold shares in this sector, and Newcastle is just as good as any," says Moreland.